U.S. opens up business with Cuba, eases embargo – Reuters

The United States announced new rules on Friday to further ease trade, travel and investment restrictions with Cuba, but Cuban President Raul Castro told President Barack Obama that Washington should go even further and lift its economic embargo on the Communist-ruled island.

The rare phone call between the two leaders followed the unveiling of changes that will allow certain U.S. companies to establish offices in Cuba, expand banking and Internet activities and eliminate limits on the amount of money that can be taken there, U.S. officials said.

Despite Castro’s appeal, the broader 53-year-old U.S. embargo will remain in place, and only Congress can remove it – something majority Republicans are considered highly unlikely to do anytime soon.

Aides to Obama touted the latest steps, which he implemented with his executive powers in defiance of critics in Congress, as a way to boost business and promote economic and political reform in Cuba. They also mark Obama’s continuing effort to chip away at the embargo since a thaw.

Critics of Obama’s detente slammed the move as another reward to Cuba with no corresponding concessions from Havana, especially on the human rights front.

The changes, while significant, stop short of allowing across-the-board investment by U.S. companies or general U.S. tourism, activities banned under the embargo itself.

They come as Washington and Havana inch toward normal relations after more than half a century of hostility that followed Cuba’s 1959 revolution. The two countries restored diplomatic ties and reopened embassies earlier this summer.

Speaking for the first time since their historic meeting in Panama in April, Obama and Castro discussed ways to advance the normalization process, including steps they “can take together and individually,” the White House said in a statement.

In a separate statement released almost simultaneously in Havana, the Cuban government said: “President Raul Castro stressed the need to deepen the reach (of the new regulations) and to eliminate definitively the blockade policy, for the benefit of both countries.”

Both governments lauded Pope Francis for his role in facilitating rapprochement late last year between the two former Cold War foes. The pope will visit Cuba this weekend before heading to the United States next week.

Set to take effect on Monday, the new U.S. regulations build on others Obama announced in January to begin lowering economic barriers with Cuba.

“A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike,” U.S. Treasury Secretary Jacob Lew said.

Obama’s term ends at the start of 2017 and his unilateral steps to loosen the embargo also appear aimed at advancing normalization with Cuba far enough that any future Republican president would be unable to reverse it.

BALL IN CUBA’S COURT

U.S. officials said the full impact of the eased restrictions will depend on whether Cubamakes economic reforms of its own. Some White House aides have privately accused Havana of dragging its feet on such changes for fear of losing its grip on the state-run economy and Cuban society.

Castro’s government, while working to improve ties, has repeatedly made clear that full normalization will require complete lifting of the embargo and the return of the U.S. naval base at Guantanamo Bay on the eastern tip of the island.